Telecommunications equipment maker Ericsson has reported strong revenue growth across Europe, the Middle East and Africa (EMEA), driven largely by rising investment in 5G networks, even as its overall profit declined in the first quarter of 2026.
The company disclosed this in its Q1 2026 financial report released on Friday, noting that EMEA operations recorded a 10 per cent organic sales increase, supported by ongoing network modernisation and wider 5G deployment across the region.
Ericsson said performance varied across its global markets, with South East Asia, Oceania and India rising by 12 per cent, while North East Asia grew by 15 per cent due to strong project activity in Japan. In contrast, the Americas posted a 2 per cent decline, attributed to reduced spending in North America following earlier investment cycles and industry consolidation.
In its Mobile Networks segment, the company reported a 7 per cent organic sales increase driven by strong demand in EMEA and parts of Asia. However, reported sales fell 8 per cent to SEK 32.9 billion due to adverse currency effects.
The Cloud Software and Services division recorded 4 per cent organic growth, supported by improved delivery in core network and managed services, although overall reported figures were lower. The Enterprise segment also grew 4 per cent organically, boosted by its Global Communications Platform, despite a reported decline following the divestment of iconectiv in 2025.
Overall, Ericsson’s total reported sales dropped 10 per cent to SEK 49.3 billion, largely due to currency headwinds estimated at SEK 7.8 billion. Gross income declined to SEK 23.3 billion from SEK 26.5 billion, while gross margin eased slightly to 47.2 per cent.
The company also reported a sharp rise in restructuring costs, which increased to SEK 3.8 billion, mainly linked to workforce reduction initiatives. Adjusted earnings before interest, tax and amortisation (EBITA) stood at SEK 5.6 billion, down from SEK 6.9 billion in the same period last year.
Despite the profit decline, free cash flow before mergers and acquisitions improved significantly to SEK 5.9 billion from SEK 2.7 billion, driven by stronger operating cash performance.
President and Chief Executive Officer, Börje Ekholm, said the company remained resilient amid global economic uncertainty, highlighting six per cent organic sales growth and continued operational stability.
He noted that rising input costs, particularly in semiconductors driven by artificial intelligence demand, remain a challenge, but said the company is responding through efficiency measures and stronger partnerships.
Looking ahead, Ericsson said it expects the Radio Access Network market to remain broadly stable but expressed confidence in outperforming the sector through its technology leadership and growth in enterprise and mission-critical services. The company also announced plans for a share buyback programme of up to SEK 15 billion starting April 23, 2026.